February 2013
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Smart Grid Drives Further Integration Across Connected Real Estate

Most of the major suppliers driving the Smart Building to Smart Grid interface business are manufacturer / installers of sophisticated building and electrical network management controls and also offer ESCO Services.

Allan McHale
Allan McHale,
Director,
Memoori


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Control Solutions, Inc

2012 has been a seminal year for three industries that share some fast moving technologies and vertical markets, Electronic Security, Energy Management and the emerging Smart Grid. The convergence of these industries is bringing about synergies that are further incentivising their adoption in domestic and commercial premises. The first two industries have been operating for nearly half a century operating in both Smart Homes and Smart Buildings and some of the major suppliers span both these markets.

 Graphic 1

Smart Homes

Under the banner of Home Automation Networks (HAN) they have been bringing together Energy Management Systems with Security systems and other aspects of automation in the home. 
 
Home Automation and Energy Management has failed to get off the ground over the last 20 years after many false dawns. But during 2012 Home Automation and Energy Management have moved forward and the interfacing of these services within the wider Home Area Network looks set to become the major synergistic force in the future, as it lowers costs and improves operational efficiencies. 
 
There are two reasons for this;

In addition the whole-house energy management systems with possible tie-ins to other systems such as security, lighting control, HVAC, motorized shading and home control and automation, looks very appealing. Where smart meters are already installed they could communicate pricing and other signals directly to smart appliances but this is now looking to be an expensive solution. However the utility industry badly needs detailed information from the energy management systems if they are to achieve optimal control over the distribution network. 
 
On the supply side of home automation and energy management, despite the many failures over the last 15 years, there is now a strong belief that through interfacing with Smart Grid together with improved energy efficiency through these controls, will deliver savings that will provide a satisfactory return on the investment. This has given rise to a significant renewed interest in HAN, where we are now seeing a plethora of new companies setting up and no shortage of interest from the investment community to supply funds.
 
The home automation market particularly in the US is now up for grabs and the winners will be the ones that can offer the seamless end-to-end experience across all services in the home and deliver to the consumers what they have come to expect from the likes of Apple. 
 
Smart Buildings

In the Smart Building Commercial sector the connection with Smart Grid should be more appealing to the utility companies because these buildings are already equipped with sophisticated energy management systems and the possibility of connecting up to distributed energy is there for the taking. However the Smart Building to Smart Grid Interface business is still in its infancy. The technology is for the most part already in place on the smart building side. 
 
The major suppliers to the Smart Grid market, whilst confident about its long term future have for a few years realized that there could be some long delays in its development. Their concerns have hinged around the immense technical and commercial challenge that the electrical utility companies face and their capability to adjust and finance it. 
 
The smart ones came to the conclusion that with the aid of Smart Building owners they could circumnavigate some of these road blocks and make a significant contribution to the reduction of CO2 whilst all the stakeholders benefitted. Through interfacing Smart Buildings with Smart Grid, even at the latter’s current stage of development, energy conservation and demand control would reduce the electrical load and where the site generated relatively clean distributed power this could be exported to the grid further reducing the CO2 emissions from the fossil fuelled power plants that will soon have to be retired. 
 
Reliable Controls All of this can be achieved for an investment of no more than 1% of the total investment needed to deliver a comprehensive Smart Grid - http://memoori.com/smart-buildings-2012 - and provides a very substantial and quick Return on Investment. More important is the fact that it will not need money from the public purse as private finance will be available for around 70% of the investment. 
 
Most of the major suppliers driving the Smart Building to Smart Grid interface business are manufacturer / installers of sophisticated building and electrical network management controls and also offer ESCO Services. To complete the full spectrum of technical and commercial attributes in order to offer a total solution to their clients they have carefully built up the additional, mainly software expertise needed through acquisition. Their target is not just to supply and install interface systems but also to wrap this up in an ESCO building performance contract that will bring even richer rewards. 
 
The four leading companies in the Smart Grid and Smart Building Controls industries include Schneider Electric, ABB, Siemens and Honeywell. The portfolio of acquisition of these companies in the last two years extends much further into the Smart Grid arena and our analysis shows that control management and hardware acquisitions grew by a factor of 10 in 2011.

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